The End of Fossil Energy and Per Capita Oil by John G Howe (5th Ed)covers updates to the book as well as other related material regarding the imminent global energy crisis.
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Sunday, 26 July 2015

We all know one thing that Greece, Cyprus, and Puerto Rico have in common–severe financial problems. There is something else that they have in common–a high proportion of their energy use is from oil. Figure 1 shows the ratio of oil use to energy use for selected European countries in 2006.

Greece and Cyprus are at the bottom of this chart. The other “PIIGS” countries (Ireland, Spain, Italy, and Portugal) are immediately above Greece. Puerto Rico is not European so is not on Figure 1, but it if were shown on this chart, it would appear between Greece and Cyprus–its oil as a percentage of its energy consumption was 98.4% in 2006. The year 2006 was chosen because it was before the big crash of 2008. The percentages are bit lower now, but the relationship is very similar now.

In my last several crude oil updates, I showed that the “smart money” was betting against crude oil’s rebound that started in March, while the “dumb money” was the main driving force behind it. I have been skeptical of oil’s rebound due to persistently high inventories and the still-sizable long position held by speculators even after last year’s oil crash. Light sweet crude oil sank 7.6 percent during last week’s China-induced commodities rout and because active oil rigs rose for a second straight week after months of declines.

West Texas Intermediate (WTI) crude oil broke down from itswedge patternthat I showed in late-June, and is now sitting just above its key $50 per barrel support level. If WTI crude breaks decisively below its $50 support level, a resumption of the 2014 oil bear market is quite possible. WTI crude may be forming aflag patternthat could indicate further declines if broken to the downside.

After several years, several months, several weeks and several days of crisis, it looks like things are about to come to a head for Greece and its banks. It becomes easier to understand exactly what GREXIT may mean for the Greek people. What happens when the banks and the government completely run out of money?

Greece has some indigenous coal production (lignite) but no oil or gas to speak of which means that all oil and gas are imported (Figure 1). This is linked to a structural trade deficit that contributes to the country’s dependency on debt. If Greece runs out of Euros, will it be able to buy oil and gas on the international markets? Greece held 90 days of oil stocks in 2010 [2]. Once that is gone then the tourist industry may collapse?

Billionaire investor Carl Icahn spoke with FOX Business Network’s (FBN) Neil Cavuto and Trish Regan about the economy, saying “I believe that there really is a bubble brewing.” He went on to say that we are in “unchartered territory,” with historically low interest rates, and “a market that’s going up artificially,” which “could be very destructive to our markets and our economy.” When asked about what the Federal Reserve should do, Icahn said, “stop worrying what the markets will do,” and “start raising rates right now.” He went on to say that the “Fed is really pandering to a lot of these guys on Wall Street that they really shouldn’t be pandering to.” Regarding whether he’d take the role of Treasury Secretary, as Donald Trump suggested,” Icahn said, “I guess I would not. I sleep too late.”

Two days of high-stakes negotiations between the finance ministers of the currency bloc resulted in a four-page document that included controversial German elements leaked on Saturday. Those measures included Greece leaving the euro temporarily by taking a “time-out” from the currency bloc if it refuses terms for talks on the new bailout or, in the event of agreement, that Greece sets aside €50bn worth of assets as collateral for new loans and for eventual privatisation. Both passages, however, did not enjoy a consensus among eurozone leaders.

What is not an illusion is the extreme trouble many EU countries are in. Besides Greece, Spain and Italy are deep in debt. Smith contends, “Spain’s debt is a trillion euros. Italy is over a trillion euros in debt. We are talking fairly serious money here.”

China’s market is also shaped by the heavy hand of the government, which makes decisions about what companies can list shares, when to promote stock rallies and, now, how to intervene when prices plummet. The government, in other words, views the market as a policy instrument, a mechanism to fulfill its political and economic goals. The result can be a volatile market that swings from boom to bust.

You run the risk of upsetting and offending your cat-loving audience with these pictures for obvious reasons, as well as your loyal cat readers around the world. This could stir social unrest amoung both groups. We will keep an eye open for future demonstrations.

Nonetheless, the one on the left demonstrates feral attributes of the species, and a preliminary diagnosis of fourth-staged advanced toxoplasmosis is evident, a disease that inflicts 60 per cent of the global population, most of whom apparently are either GOP or conservative human species, as applicable. The condition is more commonly known as ”Crazy- Cat- Lady-Syndrome”; explaining why those inflicted with this brain-eating parasite act, look and think the way they do - in both the dormant and acute stages.

Seriously. it is a widespread international, quiet and somewhat invisible health concern, that is virtually a global epidemic among humans with unknown long-term implications, albeit the rise in the conservative movements is a noteworthy symptom, recently associated with this chronic condition.

Of note, Australia plans to spend one billion over ten years eradicating feral cats from the continent because of the serious health, wildlife. political and environmental concerns.

Trumpism

Not surprisingly, Rick Perlstein, our foremost expert on the rise of movement conservatism, has the best take so far on the Trump phenomenon. As he says, nobody should be surprised to find that there are a lot of Republicans who are mad as hell and won’t take it any more:

This is important: conservatism is like bigotry whack-a-mole. The quantity of hatred, best I can tell from 17 years of close study of 60 years of right-wing history, remains the same. Removing the flag of the Confederacy, raising the flag of immigrant hating: the former doesn’t spell some new Jerusalem of tolerance; the latter doesn’t mean that conservatism’s racism has finally been revealed for all to see.

And crucially, it’s a key part of conservative mythology that the silent majority shares this hatred, that it’s only the liberal elite with its political correctness keeping Americans from saying what they know to be true. (It’s like the constant trope from the likes of Bill O’Relly that anyone who disagrees with him is a “far-left” type, no matter how mainstream their ideas.)

So why shouldn’t they rally around The Donald? The elite considers him ridiculous, but the base has been told again and again that the elite is corrupt and anti-American. The base has also been told again and again that it represents the true views of everyone except Those People. So why shouldn’t they go with someone who is their kind of guy, in style as well as substance?

Thursday, 9 July 2015

There is little doubt we
are in the midst of a perfect financial storm, that history will perhaps one
day record as "The Mother of All Global Market Crashes". Interest
rates were too low, for too long, that created unsustainable bubbles in financial
and real estate markets around the world.This time it is different was
again the usual mantra.

It never is. It Never Will Be. It couldn't last!

Mathematically,
everyone denied that a mean reversion of interest rates would ever occur and
thereby collapse global asset bubble values everywhere by 50% or more. Guess
what? Somebody bought that last tulip, and we are now experiencing the
reversion with the full brunt of its present value mathematical consequences.

Moreover,
many economies are facing debt woes and physical economic and climate change
issues causing either water,capital or food shortages. You cannot run economies
without food, water and energy; somehow Nobel Prize nor Ivy League
economists can never figure this out.

The
FED charts tell us the financial market weather is very bad. Wall St is getting
very worried and today's world headlines tell the story of a free fall in
values in Japan, China, Australia and elsewhere, that mirrors all the great
stock, bond and economic meltdowns of past and recent history. Plunging
prices for days and weeks on end - because we just run out of bigger
fools..The real laws of supply and demand.

If you have that sinking feeling that things are about to get much worse. One thing
you need not worry about, you are not alone.

Sunday, 5 July 2015

I am, of course, anxiously awaiting the results of Greferendum, although the next few days in Greece will be terrible whoever wins. But we shouldn’t lose sight of other risks facing the world. Some of us have been worrying quite a lot about China — an economy that at market exchange rates is 40 times the size of Greece, and is severely unbalanced.

And in the past month, mainly in the past few days, the Shanghai stock index has fallen almost 30 percent. This doesn’t necessarily mean that the feared crisis has come, but it’s definitely not a good sign.

Not to impolitely forget - there's that nice ole Pope Francis fella with all those “So-GOP-Called” - 188 pages of encyclical ranting and nonsense regarding the global climate. Imagine, him thinking we have a possible melting problem in the Arctic and Antarctic. “He is not even a scientist, and plus, he lives in Europe somewhere - so what does he know? Boy, that guy has some nerve! “

Anyway, he has much better connections than they could ever hope for, apparently.

Hence, Greece somehow seems like a pimple on the elephant's back in the more broader and larger context of global turmoil. Yet, there is a shining beacon of good news coming out of Iceland with reports of a miraculous economic turnaround since its meltdown. Why? They are supposedly one of the few who had actually - JAILED THE BANKERS!!!.

Not only, was it historically a great economic-political-decision and priceless-lesson for all of us, but it also leaves the door wide-open to another valuable question - WHY STOP THERE?

Global Digest Comments "In just a few short decades life on earth has changed dramatically. For in 1961 regimes were building w...

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About the Author - John G Howe

John G. Howe is a retired engineer/farmer. He has been a long-time student of energy problems and is presently lecturing on this subject. Having become so concerned about the world's looming energy crisis, Howe felt compelled to summarize this complex subject into a book in order to reach a broader world audience. His New England Yankee-farmer background combined with his engineering education gives honest appraisals and solutions for a sustainable future.